Australia's Two-Speed Property Market: Why Perth and Brisbane Are Booming While Sydney and Melbourne Stall
A Market of Two Halves
National property figures are painting a misleading picture right now. The headline says dwelling values rose 0.8% in February 2026, with annual growth sitting near 10%. That sounds like a uniformly strong market.
It’s not. Underneath those numbers, Australia’s property market has split in two.
The Boom Cities
Perth continues to be the standout performer. Values have been climbing steadily for over two years now, driven by strong population growth, a resources sector paying high wages, and a chronic housing shortage that shows no sign of easing.
Brisbane is close behind, with a median house value around $1.08 million and annual growth of 17.3%. Queensland’s population growth (fuelled by interstate migration and the lead-up to the 2032 Olympics) is keeping demand well ahead of supply.
Adelaide has quietly joined the high-growth club, with a median house price approaching $980,000. Relative affordability compared to the east coast capitals continues to attract buyers.
The Stalling Cities
Sydney values have been essentially flat for several months. At a national-high median, the February rate hike hit Sydney borrowers hardest in dollar terms. A 0.25% increase on a $1.2 million mortgage costs roughly $190 more per month, compared to $95 on a $600,000 loan.
Melbourne is in a similar position. After a strong rebound in 2023-24, affordability constraints and higher rates have taken the heat out of the market. Listings remain elevated, giving buyers more choice and less urgency.
What’s Driving the Divergence
Three main factors explain the split:
1. Affordability gaps. Perth’s median house price is still significantly below Sydney’s. Buyers in mid-sized capitals can borrow less and still buy a family home. When rates rise, the impact is proportionally smaller.
2. Population flows. Interstate migration continues to favour Queensland and Western Australia. Remote work has made it easier for workers to leave expensive cities for more affordable ones without changing jobs.
3. Supply dynamics. Perth and Brisbane have genuine housing shortages. Building activity hasn’t kept pace with population growth. Sydney and Melbourne, while still undersupplied in absolute terms, have more stock available on the market right now.
What This Means for Buyers and Investors
If you’re looking to buy your first home, the mid-sized capitals offer more entry points. But don’t chase growth for its own sake. The cities that have already run hard may be closer to a plateau.
If you’re an investor, the divergence creates opportunities, but also risk. A portfolio concentrated in one city is more exposed to local conditions. Diversification across markets (and asset types) is worth considering.
Either way, the “national average” doesn’t tell you much about your specific situation. Local knowledge matters more than ever.
Get Local Advice
Property decisions are local decisions. A mortgage broker who knows your market can help you understand what you can afford, and a financial adviser can help you work out whether property fits your broader wealth plan.
Find a mortgage broker on WealthWorks or connect with a financial adviser who understands your local market.
Frequently Asked Questions
Which Australian cities have the strongest property growth in 2026?
Perth and Brisbane are leading the market with month-on-month growth above 1%. Adelaide is also performing well. Sydney and Melbourne values have been largely flat.
Why are Sydney and Melbourne property prices stalling?
Higher price points mean the February rate hike has a bigger dollar impact on repayments. These markets also had the strongest recovery in 2023-24, so affordability has become stretched.
Is now a good time to invest in property?
It depends on your financial situation, the location, and your investment timeline. Speaking with a financial adviser and mortgage broker who understand your local market is the best starting point.
